Monday, 23 May 2011

Real money and the virtual economy

In the world of Azeroth, life can be cheap but saving up for that much desired epic mount can take months of labour. Welcome to the World of Warcraft, currently the world’s largest MMORPG (Massively Multiplayer Online Role Playing Game). In the World of Warcraft, the auction house presents the avid window shopper with a cornucopia of wonders, from fabulous swords to armour guaranteed to make you the hardest elf in your neck of the woods. To purchase such wonders, the player needs gold, something that requires quite literally hours, days or weeks of in-game labour. However visit Ebay or Eye on MOGs, a price comparison engine for virtual commodities, and you have the opportunity to convert real life earnings into virtual gold, platinum, ISK or Credits, depending on the virtual world that you alter ego(s) inhabits.

The world of Real Money Trading has come a long way since its fledgling days when gamers departing from a virtual world would use websites like Ebay to convert their in-game assets into real world money. Today it is a multi-billion dollar industry, with industry insiders like Steve Sayler of IGE estimating that as much as $2.7 billion will change hands within this secondary market during the course of 2006. This lucrative industry is now catered for by companies like MMORPG SHOP, Mogmine and MOGS, which have entire infrastructures set up to ‘farm’ for in-game gold and valuable items. Not only can you purchase in-game spending power with real world money from such sites, but many are service driven, for example offering power levelling to fast-track your avatar to new heights of maturity, turn you into a master craftsman in days rather than months, or boost your reputation within the world you inhabit. Sites like Mogmine offer specialised services like fruit picking, specified item farming, or will take your character through that instance that’s been weighing so heavily on your mind.

What we are experiencing here is a whole new type of economy where the border between the real and virtual world is blurring. There are currently hundreds of companies catering to this phenomenon, with some virtual items being sold for hundreds or even thousands of dollars.  Virtual real estate is earning real world money, with people like 43-year-old Wonder Bread deliveryman John Dugger purchasing a virtual castle for $750, setting him back more than a week’s wages. According to Edward Castronova, an economics professor at Indiana University who has performed extensive research into online economies, Norrath, the world in which EverQuest takes place, would be the 77th richest nation on the planet if it existed in real space, with players enjoying an annual income better than that of the citizens of Bulgaria or India. A visit to GameUSD indicates the current state of virtual currencies against the US dollar, demonstrating that some virtual world currencies are currently performing better than real world currencies like the Iraqi Dinar.

Real Money Trading and gold farming are met with mixed feelings in the gaming world, with some gamers criticizing the fact that real world wealth can affect in-game prestige and capabilities. Critics of the secondary market believe that such activities within the virtual economies intrude on the fantasy and provide the more economically empowered with an unfair in-game advantage. However this ignores the real world fact that earning money and advancing one’s character within a virtual world takes a good deal of time, and some gamers have more money than time on their hands. The average age for gamers is 27, and approximately half of all gamers are in full time employment. For a group of friends playing together, it can thus be relatively easy for the cash rich to fall behind the time rich in terms of gameplay, as they are obliged to spend the lion’s share of their time working their real world jobs while friends are spending time levelling their characters. For such individuals, for whom time translates into money, a few dollars is a small price to pay to ensure virtual survival the next time they enter an instance with their high level friends.  

Companies set up to farm virtual commodities are furthermore criticised as being little more than sweatshops, an attitude encouraged by the fact that many of these companies reside in low wage economies like China. However, pay and work conditions in such companies, where workers are paid to spend their days playing enjoyable, stimulating games, cannot compare to that of their compatriots who spend their days mindlessly producing the components that go into our computers, or the trainers that we wear while playing. Essentially the objection is a moral one, with many Westerners objecting to low wage economies catering to this type of leisure activity. Often workers are paid partly in kind, with food and accommodation included in remuneration packages, with the pay received thus presenting largely surplus. While pay may not equate to Western standards, this type of economic activity reminds us that we are living in a continually globalising economic environment where quality of life and spending power should be taken into account as much if not more so than say a straight dollar for yen exchange rate. Companies like Mogmine provide their staff with health benefits, holiday pay and share options, along with the chance for advancement within the organisation. Brian Lim, CEO of Mogmine, comments that ‘many mid- and high-level management started out as gamers and now they have equal or more pay than respectable managers in more conventional businesses.’ Within these lower wage economies, these thus represent desirable jobs.

Other complaints centre around the negative effect of such farming activities on in-game economies. At Mogmine, Brian Lim’s gamers play the game as it is meant to be played, but hone good techniques for gold generation along the way, thus ensuring that the work remains interesting to staff. Jonathan Driscoll comments that competition for resources has always been a feature of gameplay, and points out that his World of Warcraft farmers do their work within instances, and thus do not impact on others’ gaming experiences in the least. Complaints that farmers are responsible for in-game inflation smack of sour grapes when compared to common factors like players with high level characters acting as benefactors for their low-level alts, and thus facilitating the unrealistic in-game spending power of such low level characters. While some developers do not condone real money trade on their servers, others like MindArk, with their game Project Entropia, have included the secondary market as a part of their services. Even Sony Online Entertainment, who until recently stood staunchly against real money trade, have jumped on the band-wagon with the release of their Station Exchange service, actively facilitating Real Money Trading in Everquest 2. Other games, like the upcoming Roma Victor, embed the secondary market as part of their financial model rather than relying on the common subscription model, with players purchasing Sesterces to play and advance in the game.

Such trading of virtual goods for real world money is potentially just the tip of the iceberg for the development of virtual economies where people come together within virtual worlds to promote and trade real world products. Games like The Matrix Online already sell advertising space to real world companies to promote their products to gamers who spend their leisure time within the world.

We are thus embarking on an entirely new type of economic activity, where real and virtual worlds are meeting within an economic sphere. As a fledgling economy, it is difficult to chart where this phenomenon may take us, but the sheer weight of currency being spent and earned within these economies and the development of services to monitor real to virtual exchange rates and market prices indicates that they are here to stay.

Prospect of China’s future economy growth

China will become the world’s safest and largest investment economy in times to come given the following factors: huge market potential, rich labour resources, comparative advantage in labour cost, sound corporate governance and stable government and society. All these factors will further attract the inflow of foreign capital into China. In short, China’s economy will grow even faster in the future.

In the next ten years, China’s economy will still increase at a rate 7% - 8%. In 2020 years, should price index remains the same as today, GDP will amount to 38 trillion, per capita GDP will reach 26,000 yuan.

However, the level of per capita GDP is still very low in China at the moment, GDP per capita’s growth is still at a slow rate. GDP per capita will have to be further increased in order to raise China’s standard of living so as to bridge the present income gap between the rich and poor.   Satisfaction of consumers’ needs can be the main driver in raising China’s living standards. Domestic demand will increase as the economy grows. Therefore extensive production of goods and services can further push and sustain the economy’s growth.

Moreover, there are abundant human resources in China, and labour cost in China is much lower than the other industrialized countries. China’s education system is also being fast developed, thus more people will achieve higher level of education than in the past. With comparative advantage in cheap labour cost and increase of human capital brought about by education, future for China’s economy can be only even brighter.  

China’s labour force will get even bigger as the China is urbanizing at a fast pace, changing from a rural and agricultural society to an urban and industrialized society. Through this transition, more manpower can be utilized. Urban infrastructure will be further enhanced and an increase in urban population will bring about higher consumption level, thus driving the economy further.

The presence of such a big market, coupled by the increase in consumption power of the population brought about by urbanization, will create greater prospects for almost every industry. Market will become more efficient and industries will grow even faster than before. Domestic demand for goods and services will grow, creating better opportunities for production and investment.

Russian Brides

Most women who decide to look for husbands abroad do it NOT because they want an automatic washing machine and hamburgers. Those things are available to people in their societies also. Truly harsh conditions no longer exist in large cities where the majority of Internet mail order brides reside. Think about it, some people in your society also live in trailers! The myth about economical misery is as good as your knowledge of those societies.

Over the last decade, the world has changed dramatically and life conditions evolved not only in your country. Since the invention of the World Wide Web, technology has rapidly expanded across the globe. It is only in smaller regional towns that you can find conditions that are typically shown in Hollywood movies about Russia and Asia. As you know, lives in small towns in your country are also different from life in big cities, although the gap in foreign countries may be larger.

Regarding Russians, in general, Russian people do not consider their life miserable. In fact, they are proud to be Russians!

Russian people believe that they live in a great country, which might have some problems but overall, it is a great country. Just like you believe you live in a great country too. Russians also have their pride in being citizens of the largest country in the world, stretching over 11 time zones and which nearly twice as big as the second largest country in the world - Canada. The majority of Russian people do not think living in the USA, or Canada, or Australia is such a privilege. People that grew up in Soviet Russia all sincerely believed that they were lucky to be born in the USSR and most of them still do. Families of Russian women married to western men rarely express a desire to immigrate to those countries. They don't want to leave Russia. They enjoy traveling internationally but they don't want to emigrate.

It is a myth that Russian women search for a foreign husband to escape economical misery. This is not applicable to the majority of Russian women whose listings you see on the Internet and this was not my personal motivation either (you will read my own story in greater detail later).

Many Russian women seeking marriage abroad have advanced careers and live well even according to western standards, having paid housekeepers and nannies for their children. The conditions of life in a major Russian city such as Moscow or St. Petersburg are comparable to any European capital. Pace of life in Moscow is similar to the one of New York City.

Yes, there are some Russian women that use search for a foreign husband as the means to escape poverty, but they are a minority. Some women in your society also use marriage as means of economical escape. Comparatively, the percentages are virtually the same

The real reason why Russian women turn to seek husbands abroad is that they cannot find suitable marriage partners in Russia. Yes, it is that simple!

You might think that a beautiful, slender, physically fit, educated and intelligent woman cannot really have problems with male admirers and you would be right: attractive women in Russia do have dating offers from Russian men. But those men are seeking only casual sex. They are either already married, or unwilling to commit, or they are not worthy of marrying because they cannot provide for a family.

Since all Russian women want children in their marriages (unless they are physically unable), that’s part of the culture; they seek men who will be able to support their family while she is unable to work while caring for the child or children. Most women in Russia take full time care of their children up to the age of 3. This tradition was inherited from the Soviet times when their work position was preserved for 3 years after child birth, with fully paid maternity leave for 18 months and unpaid leave for another 18 months. Nowadays they do not pay the maternity leave but women believe it is right to stay at home with your baby when she is small and seek men who are able to provide for their families.

Russian people marry early and by the age of 22 more than 50% of people are already married. By the age of 25 about 80% of people are married. Since there are less men than women in Russia (10 million more women than men, according to the latest census), and even less men who are worthy, the competition for eligible men is extremely harsh. As a result, the men become spoiled and promiscuous.

It might be hard to believe but a normal man who has a stable job (being able to solely provide for his family), is career and health conscious, and willing to commit, seems like a fairy tale prince to a single Russian woman. Guys like this are scarce in Russia and not available for long.

In contrast, good-looking women are in abundance in Russia, since the tough competition drives women to perfect their looks.

Historically, during the 20th century Russia had many wars, with World War II alone taking 20 million lives and another 20 million of people died in Stalin’s concentration camps. Nearly 90% of those victims were men. After the war, simply having a man was a blessing. Then there was the 14-year Afghanistan conflict in which hundreds of thousands of young Russian men died. Throughout the entire 20th century Russian women had to compete to ensure they had a husband.

Now they've got Chechnya - since 1993, just a few years after Russian troops left Afghanistan.

It is scientifically proven that where there are many more women in society than men, men tend to pursue short-term sexual strategies and are unwilling to commit. Along with other cultural moments, such as traditions of hard drinking and male chauvinism in Russia, it is no wonder that contemporary Russian women seize the opportunities offered by modern technologies and elect to broaden their horizons in their search for a suitable mate.

Economic Causes of the American Revolution

What brought about the American Revolution? Like most military conflicts, the
Revolution was spurred by a web of complex social, political, and economic factors.
However, economic concerns were arguably paramount when colonists finally decided to
wage war against the British monarchy. Indeed, the era’s most famous rallying cry
remains “No taxation without representation!”

Following the French and Indian War (or Seven Years War), the previously prosperous
British government found that its debt had nearly doubled. Parliamentarians soon
proposed that the prosperous American colonists shoulder more of the monarchy’s
expenses. Several new laws were then passed to benefit the Crown and squeeze the
colonists’ pocketbooks.

The trend began with the Currency Act of 1764. This forbade the colonists’ printing of
paper currency. Colonists were not mining precious metals for coins, and they were now
even more dependent upon Britain for capital. The Currency Act significantly reduced
the colonists’ options for economic self-determination, and this was particularly resented
in light of their existing trade deficit with Great Britain.

Next, the Sugar Act of 1764 aimed to enforce laws related to molasses importation. Prior
to the French and Indian War, the wealthy British Empire could afford to be lax with its
colonial customs laws. American merchants became accustomed to circumventing trade
tariffs. In effect, they had enjoyed a relatively independent economic system. But when
the King became concerned about his coffers, enforcement of existing tax laws became a
top priority. As taxes on molasses climbed higher, the colonial rum industry atrophied.
The loss of the valuable rum trade meant that associated trade for raw materials, like
lumber from the Caribbean, dwindled. The Sugar Act also added tariffs to non-sugary
goods like coffee and calico fabric. Taxation without representation began to permeate
more and more aspects of the colonial economy.

Finally, the Stamp Act of 1765 assessed fees for stamps. These stamps were to appear not
only on mail, but on every colonial newspaper, legal document, playing card, mortgage,
and other printed materials. This final wide-sweeping act was designed to raise revenue
for the salaries of British troops and government elites. In many colonists’ opinions, the
Stamp Act most clearly and illegally disconnected taxation from representation.

To oppose the Stamp Act, most colonies sent representatives to a special session in New
York City. The delegates shed their traditionally humble acquiescence to British rule and
asserted that “no taxes… can be constitutionally imposed… but by their respective
legislatures.” American public opinion supported these delegates’ refusal to accept the
Stamp Act. Popular new leaders like Samuel Adams and Patrick Henry emerged to
endorse mob resistance, and by 1765 many American merchants had subscribed to a
Non-Importation Agreement.

However, the British continued to resist colonial demands for increased self-rule. The
colonists’ verbal protest ultimately became militant. In Massachusetts, for example,
farmers’ political groups rose in rebellion. Armed and angry, farmers’ militias filled
Worcester County’s village green, prevented the opening of traditional British courts and
forcing the resignation of royally-appointed judges. The Worcester County Committees
of Correspondence proposed a convention “of the people” that would design new
institutions of local governance. Locally-grown militias in Virginia and Pennsylvania
followed suit.

Some American colonists attempted a compromise in 1774. Joseph Galloway, a self-
proclaimed “man of loyal principles”, presented a plan to the First Continental Congress.
Galloway’s peace plan combined a royally-appointed colonial governorship with the
transfer of legislative and taxation powers to the colonists. However, Galloway’s plan
was no match for many colonists’ suspicions of the British. The compromise was rejected
by a single vote.

At last, in the spring of 1775, the British government ordered the royal governor Thomas
Gage to suppress public assembly in Concord, Massachusetts. When Gage attempted to
seize supplies of the local militia, the Patriot “minutemen” – ready to fight at a minute’s
notice – inflicted heavy casualties upon his British troops. The colonists, now self-
identified as sons and daughters of America, saw little possibility of reconciliation with
Great Britain. The American Revolution had begun.